Broadcom acquires VMware: Not all that odd?

What is a chipmaker thinking when they acquire a software company like VMware?  It may have made sense they would try to acquire another chip maker like Qualcomm to expand their capabilities in chip production. But to dole out USD61 billion in a cash and stock transaction, to possess VMware’s virtualisation capabilities?

Broadcom’s CEO, Hock Tan, is  famously known for taking over companies that do not seem to be a chip maker’s core expertise. He did it by acquiring CA Technologies in 2018, Symantec’s enterprise security division in 2019, and then now, virtualisation focused solutions provider, VMware.

After interviewing over a dozen VMware customers, The Register has this to say: VMware customers have watched Broadcom’s acquisitions and don’t like what they see.  

The publication did an interesting analysis of Broadcom’s strategy after the company’s  November 2021 Investor Day, which basically intends to focus on 600 customers, or strategic accounts. The  strategy methodically took into consideration that these customers are often in highly regulated industries, and therefore are risk-averse to change, including change of suppliers.

Not all that odd

There is also compelling comment here about Broadcom recognising VMware’s potential to build a broad IoT software and management solution with.